The length of David Ross’ minimum non-parole period is “crushing” says his lawyer, who applied to the Court of Appeal for it to be reduced.

Anger from Ross’ out-of-pocket victims is still very raw as one of the country’s biggest fraudsters appealed against the minimum sentence he must serve in jail before becoming eligible for parole. [Read more…]

NEW ZEALAND’S single biggest fraudster is no longer a member of the New Zealand Institute of Chartered Accountants, which found it “difficult to imagine more serious offending” than his.

David Robert Gilmour Ross, whose company Ross Asset Management, fleeced at least 700 investors, was jailed last November for 10 years and 10 months for running a fraudulent scheme in which investors lost about $115 million.

At a NZICA disciplinary tribunal hearing last week he was charged with being convicted of offences punishable by imprisonment or fine that reflected on his fitness to practice accountancy and brought the profession into disrepute.

A decision released by the professional body yesterday ordered that Ross be removed from the institute’s register of members.

He was not represented and entered no plea at the hearing.

The tribunal found “it difficult to imagine more serious professional misconduct than this”, which was reflected in Ross’ sentence, it said.

Ross had admitted running a Ponzi scheme that he disguised by falsely reporting clients’ investments.

Despite the severity of the charges, the tribunal ordered no monetary penalty as it would dilute funds available to investors.

Ross was ordered to pay full costs of $7200 to the institute for the expense of the hearing.

It also ordered full publicity and said Ross had 14 days to appeal against the decision

Source: Accountants turf out disgraced Ross

Reported by Hamish McNicol

The Dominion Post. Friday 25 April 2014. P. B7.

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Background to story see earlier postings by SPCS:

INTERIM SUSPENSION OF DAVID ROSS’ MEMBERSHIP OF NZICA ANNOUNCED 16 January 2013

Wellington’s David Ross, at the centre of the collapse of a suspected Ponzi scheme involving about $450 million, was stripped of his membership of the Institute of Chartered Accountants (ICA), but it was only an “interim suspension”. David Robert Gilmour Ross lost his institute membership after a hearing held in secretin the middle of December 2013. The “interim suspension” was announced by the ICA disciplinary tribunal on 16 January 2013.

Wellington’s David Ross, at the centre of the collapse of a suspected Ponzi scheme involving about $450 million, has been stripped of his membership of the Institute of Chartered Accountants (ICA), for now.

Under an “interim suspension”, David Robert Gilmour Ross lost his institute membership after a hearing held in secret in the middle of last month. The suspension was announced by the ICA disciplinary tribunal yesterday.

Financial Markets Authority (FMA) staff raided Ross’ offices on The Terrace late last year after investors complained they could not get their money.

Receivers have been able to locate only about $11m of the almost $450m some 900 investors believed was being managed on their behalf by Ross Asset Management Ltd (RAM) [Co. No 455971. Formerly called Quill Investments Ltd].

Last month the first disciplinary action was taken against Ross, with the FMA suspending his licence as an authorised financial adviser for six months as it continues to investigate possible Securities Act breaches.

After the FMA action, the ICA said matters identified by RAM’s receivers warranted a complaint to the professional conduct committee from the institute’s chief executive, which led to the interim suspension.

Ultimately, the institute’s disciplinary tribunal has the power to strike off Ross as a chartered accountant.

Bruce Tichbon, spokesman for the Ross Asset Management Investors Group, said they had expected the suspension.

Tichbon said knowing Ross was a chartered accountant had given him confidence in Ross.

“It gave him an aura of professional respectability,” he said.

Tichbon said other members of the investor group had asked him to pursue whether Ross’ status as an accountant required auditing by the institute.

“I have been informed there were certain burdens on the accounting professional bodies to test the veracity of his services and therefore there was likely to be some grounds for claim there,” Tichbon said, though he had not confirmed that.

The institute carries out a regular review of accountants who hold a certificate of public practice, but it would not comment directly on Ross’ professional conduct. Only members of the institute can call themselves chartered accountants, which means they have certain qualifications and experience.

“The lack of legal clarity is a serious and cruel issue,” he said, because there was no case law for apparent Ponzi schemes.

Hundreds of investors were left totally up in the air. There were no clear guidelines on how the case should be managed – for example, whether money could be clawed back from some investors who had earlier taken money out. Earlier reports from the receivers showed that since 2000 just over $303m had been invested through the firm, while $29.8m was taken out in fees, and investors withdrew $289m.

“People are really suffering terribly,” Tichbon said, with some investors suffering from depression.

“Instead of a [regulatory] ambulance at the bottom of the cliff, there is a cesspit of broken glass and alligators.”

The Securities Commission appears to have been warned about suspected Ponzi scheme operator David Ross three years ago, but took no action. [David Ross was sole director of failed Ross Asset Management Ltd]

An email obtained through the Official Information Act shows Securities Commissioner Annabel Cotton was told of concerns about Ross in September 2009.

At the time, Ms Cotton had a special role as commissioner for financial advisers, responsible for developing a code of conduct for the financial advisory industry.

The email reads:

“Has anyone every [sic] looked into the activities of David Ross funds management? He doesn’t ad [sic] up to me and I could explain why verbally if you wished.”

The name of the sender was redacted from the OIA document, although it is understood the sender was a professional investor.

Ms Cotton said she had forwarded the email from her personal address to her Securities Commission address so that she could discuss it with commission staff when she was next in the office, “and to the best of my knowledge that’s what I would have done”.

“What happened from there I don’t know. I would have left it with a senior staff to work things from there and decide what to do.”

The Dominion Post has learnt of another individual who claimed he contacted Ms Cotton verbally about Ross, before September 2009.

The person, who asked not to be named, said he was told the commission was too busy to look into his concerns.